In the proposed research demonstration project we are seeking to develop, implement and assess an innovative program that is specifically designed for the mentally ill among the homeless street population. The program will reflect the values and technology of psychiatric rehabilitation. It will emphasize continuity in relationships between clients and caregivers which will begin with outreach and continue through follow along. The program will embody a supported housing philosophy, emphasizing on-site rehabilitation, in stable, long term housing that, to the degree possible, reflect client choice. Importantly, program participants will have guaranteed access to a range of permanent housing alternatives that are available from a new joint state/city initiative for the homeless mentally ill. A true experimental design will be employed in which individuals will be randomly assigned either to the experimental program or to the control condition that will receive the standard treatment afforded to mentally ill street people. Standard treatment reflects a program model that is inherently transitional in its approach including a continuum of care from outreach through drop-in centers to shelters and ultimately long term housing. Each of these differing points on the continuum may be organizationally independent and informally coordinated. While the experimental group will have guaranteed access to housing, the control condition will have greatly improved housing availability owing to the new city/state agreement. Individuals from both groups will e extensively monitored with data collected over 18 months by research interviewers. These three domains will be the dependent variables in treatment outcome analyses that will be augmented by a detailed evaluation of the implementation process. This PAL collaboration between the New York Office of Mental Health, the New York City Health and Hospitals Corporation and the Boston University Center for Psychiatric Rehabilitation, therefore, will allow a rigorous test of this rehabilitation approach to housing. The results should yield important insights into the characteristics of this understudied population and their response to differing service approaches.